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目录

美国
证券交易委员会
华盛顿特区20549
 
表格 10-Q
 
☒根据1934年证券交易法第13或15(d)节的季度报告
截至季度结束日期的财务报告09/30/2024
☐根据1934年证券交易法第13或15(d)节的转型报告书
过渡期从 至  .            
佣金文件号 000-20557
 
blackandwhiteandelogoa03.jpg
THE 安德森斯，公司。
(按其章程规定规定的准确名称的发起人)
 
俄亥俄州34-1562374
（注册或组织的国家）（纳税人识别号码）
1947号布赖尔菲尔德大道
莫米镇俄亥俄州43537
，（主要行政办公地址）(邮政编码)

(419) 893-5050
（电话号码）
在法案第12(b)条的规定下注册的证券：
每个类别的名称： 交易代码 注册在每个交易所的名称：
普通股，每股面值$0.00，每股配发价值$0.01 ANDE 纳斯达克交易所

请勾选以下内容。申报人是否（1）在过去12个月内（或申报人需要报告这些报告的时间较短的期间内）已提交证券交易法规定的第13或15（d）条要求提交的所有报告；以及（2）过去90天内已被要求提交此类报告。    Yes  ý    否  ¨
请以复选标记指示注册者是否根据监管S-t规定第405条提交了每个交互式数据文件（§ 在过去的12个月（或注册人被要求提交这些文件的较短期间）中（参见本章第232.405节）Yes  ý    否  ¨
请勾选相应的内容，表示报告主体是否为大型加速文件提交者、加速文件提交者、非加速文件提交者、较小的报告公司或新兴成长型公司。请参阅《交易所法》规则120亿.2中对“大型加速文件提交者”、“加速文件提交者”、“较小的报告公司”和“新兴成长型公司”的定义。
大型加速报告人ý加速文件提交人☐
非加速文件提交人☐更小的报告公司☐
新兴成长公司☐
如果是新兴成长型公司，请在复选框中打勾，以确定注册人是否选择不使用在1934年证券交易法第13(a)条项下提供的任何新的或修订的财务会计准准则的延长过渡期。☐
请用勾号表示该注册公司是否为壳公司（如《交易法》第120亿2条规定） 是 ☐    否  ý

截至2024年5月17日，申报人共有 34,070,0032024年10月25日尚未上市的普通股。

目录
安德森斯公司。
指数
 
 页码
第一部分 财务信息
三个基本报表的简明综合经营业绩 - 有九起类似诉讼针对JAVELIN的要约收购和合并被提起，称违反信托责任，寻求公正补偿，包括但不限于，禁止交易的达成、撤销、解除已经交易的事项，以及发送费用、补贴成本，包括合理的律师费和费用。唯一的佛罗里达州诉讼从未向被告送达，该案件于2017年1月20日自愿撤回并关闭。2016年4月25日，马里兰法院颁布了一项命令，将马里兰案件合并成一起诉讼，标题为JAVELIN Mortgage Investment Corp.股东诉讼（案号24-C-16-001542），并指定一个马里兰案件的律师作为临时首席联合法律顾问。2016年5月26日，临时首席律师提交了经修订的钒化铁质量投诉，声称违反信托责任的集体索赔，教唆和共谋违反信托责任以及浪费。2016年6月27日，被告提出了驳回合并修订集体投诉申请的动议，声称未陈述可以获得救济的规定。在2017年3月3日，听证会召开了驳回动议，法院保留了裁定。法院数次推迟动议陈述的裁定。2024年2月14日，法院颁布裁定，支持被告的驳回动议，并驳回所有原告的权利，无需上诉。在2024年3月11日，原告提出了对法院裁定的上诉通知。2024年7月3日，原告自愿撤回之前提出的上诉通知。月份结束时九月 30、2024和2023年
综合收益简表-三个 有九起类似诉讼针对JAVELIN的要约收购和合并被提起，称违反信托责任，寻求公正补偿，包括但不限于，禁止交易的达成、撤销、解除已经交易的事项，以及发送费用、补贴成本，包括合理的律师费和费用。唯一的佛罗里达州诉讼从未向被告送达，该案件于2017年1月20日自愿撤回并关闭。2016年4月25日，马里兰法院颁布了一项命令，将马里兰案件合并成一起诉讼，标题为JAVELIN Mortgage Investment Corp.股东诉讼（案号24-C-16-001542），并指定一个马里兰案件的律师作为临时首席联合法律顾问。2016年5月26日，临时首席律师提交了经修订的钒化铁质量投诉，声称违反信托责任的集体索赔，教唆和共谋违反信托责任以及浪费。2016年6月27日，被告提出了驳回合并修订集体投诉申请的动议，声称未陈述可以获得救济的规定。在2017年3月3日，听证会召开了驳回动议，法院保留了裁定。法院数次推迟动议陈述的裁定。2024年2月14日，法院颁布裁定，支持被告的驳回动议，并驳回所有原告的权利，无需上诉。在2024年3月11日，原告提出了对法院裁定的上诉通知。2024年7月3日，原告自愿撤回之前提出的上诉通知。月份结束时九月 30、2024和2023年
控件简明综合股本报表 – 三月和 有九起类似诉讼针对JAVELIN的要约收购和合并被提起，称违反信托责任，寻求公正补偿，包括但不限于，禁止交易的达成、撤销、解除已经交易的事项，以及发送费用、补贴成本，包括合理的律师费和费用。唯一的佛罗里达州诉讼从未向被告送达，该案件于2017年1月20日自愿撤回并关闭。2016年4月25日，马里兰法院颁布了一项命令，将马里兰案件合并成一起诉讼，标题为JAVELIN Mortgage Investment Corp.股东诉讼（案号24-C-16-001542），并指定一个马里兰案件的律师作为临时首席联合法律顾问。2016年5月26日，临时首席律师提交了经修订的钒化铁质量投诉，声称违反信托责任的集体索赔，教唆和共谋违反信托责任以及浪费。2016年6月27日，被告提出了驳回合并修订集体投诉申请的动议，声称未陈述可以获得救济的规定。在2017年3月3日，听证会召开了驳回动议，法院保留了裁定。法院数次推迟动议陈述的裁定。2024年2月14日，法院颁布裁定，支持被告的驳回动议，并驳回所有原告的权利，无需上诉。在2024年3月11日，原告提出了对法院裁定的上诉通知。2024年7月3日，原告自愿撤回之前提出的上诉通知。6个月 结束截至2024年和2023年9月30日
第二部分.其他信息


目录

第一部分财务信息
项目1：基本报表

安德森斯公司。
未经审计的简短综合业绩表(未经审计)
（以千为单位，除每股数据外）
 
 截至9月30日的三个月，截至9月30日的九个月
 2024202320242023
销售和商品营收$2,620,988 $3,635,691 $8,134,410 $11,537,112 
销售和商品营收成本2,443,863 3,477,990 7,653,594 11,009,463 
毛利润177,125 157,701 480,816 527,649 
营业、管理和一般性费用120,494 126,306 356,466 359,548 
资产减值— — — 87,156 
利息费用，净额8,361 8,188 21,494 38,766 
其他收入，净额13,922 15,178 30,651 35,623 
税前收入62,192 38,385 133,507 77,802 
所得税费用10,731 7,862 16,911 23,710 
净利润51,461 30,523 116,596 54,092 
归属于非控股权益的净收入24,096 20,815 47,674 4,088 
归属于安德森斯公司的净利润。$27,365 $9,708 $68,922 $50,004 
基本稀释每股股份平均数34,069 33,752 34,020 33,706 
稀释后平均每股持有数。34,358 34,270 34,321 34,266 
每股收益归属于安德森斯公司普通股股东：
基本每股收益归属于安德森斯公司普通股股东$0.80 $0.29 $2.03 $1.48 
稀释后每股收益归属于安德森斯公司普通股股东$0.80 $0.28 $2.01 $1.46 
请参见简明合并财务报表的附注

安德森斯公司 | 2024年第三季度10-Q表格 | 1
目录
安德森斯公司。
未经审计的简化合并综合收益表
（以千为单位）
 
 截至9月30日的三个月，截至9月30日的九个月
 2024202320242023
净利润$51,461 $30,523 $116,596 $54,092 
其他综合收益(损失), 净额(税后):
未确认的精算损失和往年服务成本变动(222)(276)(572)(653)
外币翻译调整3,792 (2,600)(1,091)836 
现金流量套期交易活动(9,375)5,973 (5,826)7,912 
其他综合收益（损失）(5,805)3,097 (7,489)8,095 
综合收益45,656 33,620 109,107 62,187 
归属于非控股权益的综合收益24,096 20,815 47,674 4,088 
归属于安德森斯公司的综合收益$21,560 $12,805 $61,433 $58,099 
请参见简明合并财务报表的附注

安德森斯公司 | 2024年第三季度10-Q表格 | 2
目录

安德森斯公司。
汇编的资产负债表(未经审计)
 （以千为单位）
九月三十日，
2024		12月31日,
2023		九月三十日，
2023
资产
流动资产：
现金及现金等价物$454,065 $643,854 $418,055 
2,687,823 756,618 762,549 816,686 
存货884,339 1,166,700 985,292 
当前商品衍生资产122,326 178,083 239,595 
其他资产113,726 55,777 67,471 
总流动资产2,331,074 2,806,963 2,527,099 
物业、厂房和设备，净值709,951 693,365 680,188 
其他资产净额347,274 354,679 380,815 
资产总额$3,388,299 $3,855,007 $3,588,102 
负债和股本
流动负债:
短期债务$14,716 $43,106 $14,138 
交易和其他应付款774,347 1,055,473 822,153 
客户预付款和递延收入67,899 187,054 211,867 
商品衍生工具负债 - 流动 85,640 90,849 142,511 
长期债务的流动部分27,727 27,561 27,535 
应计费用及其他流动负债207,543 232,288 189,430 
流动负债合计1,177,872 1,636,331 1,407,634 
开多期限为长期的债务，减去流动负债542,564 562,960 569,730 
其他长期负债144,855 139,329 161,652 
负债合计1,865,291 2,338,620 2,139,016 
承诺和担保（其他)注11)
股东权益：
无面值的普通股（63,000授权股数为34,083 shares at 9/30/2024 and 34,064 shares issued at 12/31/2023 and 9/30/2023)
143 142 142 
Preferred shares, without par value (1,000 无 已发行的）
— — — 
股本溢价382,009 387,210 383,724 
库藏股，成本为(12, 270 和 270 于2024年9月30日、2023年12月31日和2023年9月30日分别的股本
(572)(10,261)(10,266)
累计其他综合收益15,376 22,865 28,579 
保留盈余932,215 882,943 838,556 
安德森斯公司的股东权益总额1,329,171 1,282,899 1,240,735 
非控制权益193,837 233,488 208,351 
股东权益总计1,523,008 1,516,387 1,449,086 
负债和所有者权益总额$3,388,299 $3,855,007 $3,588,102 
See Notes to Condensed Consolidated Financial Statements
The Andersons, Inc. | Q3 2024 Form 10-Q | 3
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The Andersons, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
 Nine months ended September 30,
 20242023
Operating Activities
Net income$116,596 $54,092 
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization91,626 93,800 
Asset impairment— 87,156 
Other15,146 1,347 
Changes in operating assets and liabilities:
Accounts receivable3,498 406,263 
Inventories278,947 748,118 
Commodity derivatives49,327 99,479 
Other current and non-current assets(59,376)2,048 
Payables and other current and non-current liabilities(433,069)(796,216)
Net cash provided by operating activities62,695 696,087 
Investing Activities
Purchases of property, plant and equipment and capitalized software(93,230)(108,718)
Acquisition of businesses, net of cash acquired(9,561)(24,385)
Insurance proceeds9,219 — 
Proceeds from sale of a business— 10,318 
Other2,980 5,522 
Net cash used in investing activities(90,592)(117,263)
Financing Activities
Net payments under short-term lines of credit(27,054)(261,152)
Payments of long-term debt(20,649)(42,734)
Distributions to noncontrolling interest owner(87,325)(44,304)
Dividends paid(19,466)(18,771)
Value of shares withheld for taxes(8,101)(6,627)
Proceeds from issuance of long-term debt— 100,000 
Other— (2,258)
Net cash used in financing activities(162,595)(275,846)
Effect of exchange rates on cash and cash equivalents703 (192)
(Decrease) increase in cash and cash equivalents(189,789)302,786 
Cash and cash equivalents at beginning of period643,854 115,269 
Cash and cash equivalents at end of period$454,065 $418,055 
See Notes to Condensed Consolidated Financial Statements
The Andersons, Inc. | Q3 2024 Form 10-Q | 4
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The Andersons, Inc.
Condensed Consolidated Statements of Equity (Unaudited)
(In thousands, except per share data)
Three Months Ended
 Common
Shares		Additional
Paid-in
Capital		Treasury
Shares		Accumulated
Other
Comprehensive Income		Retained
Earnings		Noncontrolling
Interests		Total
Balance at June 30, 2023
$142 $380,376 $(10,270)$25,482 $835,256 $207,496 $1,438,482 
Net income9,708 20,815 30,523 
Other comprehensive income6,060 6,060 
Amounts reclassified from accumulated other comprehensive income (loss)(2,963)(2,963)
Distributions to noncontrolling interests(19,960)(19,960)
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (0 shares)
3,348 4 3,352 
Dividends declared ($0.185 per common share)
(6,243)(6,243)
Restricted share award dividend equivalents(165)(165)
Balance at September 30, 2023
$142 $383,724 $(10,266)$28,579 $838,556 $208,351 $1,449,086 
Balance at June 30, 2024
$143 $378,453 $(631)$21,181 $911,455 $209,661 $1,520,262 
Net income27,365 24,096 51,461 
Other comprehensive income (loss)(2,383)(2,383)
Amounts reclassified from accumulated other comprehensive income (loss)(3,422)(3,422)
Distributions to noncontrolling interests(39,920)(39,920)
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (1 shares)
3,556 58 3,614 
Dividends declared ($0.19 per common share)
(6,472)(6,472)
Restricted share award dividend equivalents1 (133)(132)
Balance at September 30, 2024
$143 $382,009 $(572)$15,376 $932,215 $193,837 $1,523,008 
The Andersons, Inc. | Q3 2024 Form 10-Q | 5
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Nine Months Ended
 Common
Shares		Additional
Paid-in
Capital		Treasury
Shares		Accumulated
Other
Comprehensive Income		Retained
Earnings		Noncontrolling
Interests		Total
Balance at December 31, 2022
$142 $385,248 $(15,043)$20,484 $807,770 $231,168 $1,429,769 
Net income50,004 4,088 54,092 
Other comprehensive income16,133 16,133 
Amounts reclassified from Accumulated other comprehensive income (loss)(8,038)(8,038)
Distributions to noncontrolling interests(44,304)(44,304)
Deconsolidation of joint venture17,399 17,399 
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (222 shares)
(2,146)6,359 4,213 
Purchase of treasury shares (51 shares)
(1,747)(1,747)
Dividends declared ($0.56 per common share)
(18,728)(18,728)
Restricted share award dividend equivalents622 165 (490)297 
Balance at September 30, 2023
$142 $383,724 $(10,266)$28,579 $838,556 $208,351 $1,449,086 
Balance at December 31, 2023
$142 $387,210 $(10,261)$22,865 $882,943 $233,488 $1,516,387 
Net income68,922 47,674 116,596 
Other comprehensive income3,545 3,545 
Amounts reclassified from Accumulated other comprehensive income (loss)(11,034)(11,034)
Distributions to noncontrolling interests(87,325)(87,325)
Stock awards, stock option exercises and other shares issued to employees and directors, net of income tax of $0 (257 shares)
1 (5,909)9,627 3,719 
Dividends declared ($0.57 per common share)
(19,416)(19,416)
Restricted share award dividend equivalents708 62 (234)536 
Balance at September 30, 2024
$143 $382,009 $(572)$15,376 $932,215 $193,837 $1,523,008 
See Notes to Condensed Consolidated Financial Statements

The Andersons, Inc. | Q3 2024 Form 10-Q | 6
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The Andersons, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)


1. Basis of Presentation and Recently Issued Accounting Standards

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial statements and are in the form prescribed by the Securities and Exchange Commission (the “SEC”) in instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of The Andersons, Inc. and its wholly owned and controlled subsidiaries (the “Company”). In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair statement of financial position, results of operations and cash flows for the periods indicated. All intercompany accounts and transactions have been eliminated in consolidation.

The results in these Condensed Consolidated Financial Statements are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024. An unaudited Condensed Consolidated Balance Sheet as of September 30, 2023, has been included as the Company operates in several seasonal industries.

The Condensed Consolidated Balance Sheet data at December 31, 2023, was derived from the audited Consolidated Financial Statements but does not include all disclosures required by GAAP. The accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in The Andersons, Inc. Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K”).

Variable Interest Entities ("VIEs")

The Company consolidates any VIE of which it is the primary beneficiary. The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements that do not involve controlling voting interests. A variable interest holder is required to consolidate a VIE if that party has the power to direct the activities of the VIE that most significantly impact the VIE's economic performance and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company does not consolidate a VIE in which it has a majority ownership interest when the Company is not considered the primary beneficiary. The Company evaluates its relationships with the VIEs on an ongoing basis to determine if it is the primary beneficiary.

The Company's Condensed Consolidated Financial Statements include the assets, liabilities and results of operations of VIEs for which the Company is deemed to be the primary beneficiary. The other equity holders’ interests are reflected in "Net income attributable to noncontrolling interests" in the Condensed Consolidated Statements of Operations and "Noncontrolling interests" in the Condensed Consolidated Balance Sheets.

On October 1, 2019, the Company formed The Andersons Marathon Holding Company ("TAMH") with MPC Investments, LLC ("Marathon") for the primary purpose of producing ethanol and additional co-products such as dried distillers grains and corn oil. TAMH has plants located in Iowa, Indiana, Michigan, and Ohio. The plants have a combined nameplate production capacity of 405 million gallons of ethanol but have a history of outperforming the nameplate capacity. The Company owns 50.1% of TAMH's common units and management has determined that TAMH is a VIE in which the Company is the primary beneficiary. Accordingly, TAMH is consolidated within the Company’s Consolidated Financial Statements and records noncontrolling interest for the share of the entity owned by Marathon.

ELEMENT was structured as a limited liability company which began operations in 2019 for the primary purpose of producing ethanol and additional co-products such as dried distillers grain and corn oil. The Company held 51% of the membership units and the Company had acted as the manager of the facility. As a result, ELEMENT was concluded to be a VIE in which the Company was the primary beneficiary and had been consolidated within the Company’s Consolidated Financial Statements. On April 18, 2023, ELEMENT was placed into receivership and a receiver was appointed, which took possession and control of the rights and interests of ELEMENT. With this appointment, while retaining its investment in ELEMENT, the Company ceased to have a controlling financial interest and was no longer deemed to be the primary beneficiary in the subsidiary. Accordingly, the Company deconsolidated ELEMENT at that time and began accounting for the subsidiary as an equity method investment.
The Andersons, Inc. | Q3 2024 Form 10-Q | 7
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Therefore, operating results from January 1, 2023, to April 18, 2023, are included within the Condensed Consolidated Statements of Operations.

The creditors of the consolidated VIEs do not have recourse to the Company other than to the assets of the consolidated VIEs. The following table summarizes the carrying amounts of the assets and liabilities of TAMH, the Company's only consolidated VIE for the periods presented in the Company’s Condensed Consolidated Balance Sheets:

 (In thousands)
September 30,
2024		December 31,
2023		September 30,
2023
Assets
Current assets:
Cash and cash equivalents$99,414 $153,258 $106,279 
Accounts receivable, net4,857 9,324 8,446 
Inventories36,605 61,270 36,912 
Other current assets5,018 6,844 7,169 
Total current assets145,894 230,696 158,806 
Property, plant and equipment, net273,799 270,379 269,433 
Other assets, net24,483 25,434 26,167 
Total assets$444,176 $526,509 $454,406 
Liabilities
Current liabilities$44,310 $51,020 $40,990 
Long-term liabilities11,051 12,010 13,438 
Total liabilities$55,361 $63,030 $54,428 

Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires an enhanced disclosure of significant segment expenses on an annual and interim basis. This guidance will be effective for the annual periods beginning with the year ended December 31, 2024, and for interim periods beginning January 1, 2025. Early adoption is permitted. Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements. We do not expect the adoption of this guidance to have a material impact on the Consolidated Financial Statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective for the annual periods beginning with the year ended December 31, 2025. Early adoption is permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. We do not expect the adoption of this guidance to have a material impact on the Consolidated Financial Statements.



The Andersons, Inc. | Q3 2024 Form 10-Q | 8
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2. Inventories

Major classes of inventories are presented below. Readily Marketable Inventories ("RMI") are agricultural commodity inventories such as corn, soybeans, wheat, and ethanol co-products, among others, carried at net realizable value which approximates fair value based on their commodity characteristics, widely available market information, and pricing mechanisms. The net realizable value of RMI is calculated as the fair value (spot price of the commodity in an exchange), less cost of disposal and transportation based on the local market. All other inventories are held at lower of cost or net realizable value.
(in thousands)September 30,
2024		December 31,
2023		September 30,
2023
Grain and other agricultural products (a)$648,808 $886,725 $718,290 
Energy inventories (a)13,688 21,705 18,939 
Ethanol and co-products (a)80,577 104,349 94,375 
Plant nutrients and cob products141,266 153,921 153,688 
Total inventories$884,339 $1,166,700 $985,292 
(a) Includes RMI of $639.7 million, $862.5 million, and $708.2 million at September 30, 2024, December 31, 2023, and September 30, 2023, respectively.


3. Property, Plant and Equipment

The components of Property, plant and equipment, net are as follows:
(in thousands)September 30,
2024		December 31,
2023		September 30,
2023
Land$30,984 $30,912 $30,872 
Land improvements and leasehold improvements86,206 82,438 79,829 
Buildings and storage facilities379,681 365,744 360,234 
Machinery and equipment1,004,315 951,544 916,552 
Construction in progress47,656 36,541 44,420 
1,548,842 1,467,179 1,431,907 
Less: accumulated depreciation 838,891 773,814 751,719 
Property, plant and equipment, net$709,951 $693,365 $680,188 

Depreciation expense on property, plant, and equipment was $25.0 million and $24.9 million for three months ended September 30, 2024, and 2023, respectively. Additionally, depreciation expense on property, plant and equipment was $74.3 million and $75.5 million for the nine months ended September 30, 2024, and 2023, respectively.

In the first quarter of 2023, the Company recorded a $87.2 million impairment charge related to ELEMENT. The plant faced operational and market-based challenges which were exacerbated by a shift in the California Low Carbon Fuel Standard credit markets and high western corn basis. At the time of the impairment, the Company owned 51% of ELEMENT and it was a consolidated entity, as such, 49% of the impairment charge was represented in Net income attributable to noncontrolling interests in the Company's Condensed Consolidated Statements of Operations.


4. Derivatives

The Company’s operating results are affected by changes to commodity prices. The Trade and Renewables businesses have established “unhedged” futures position limits (the amount of a commodity, either owned or contracted for, that does not have an offsetting derivative contract). To reduce the exposure to market price risk on commodities owned and forward purchase and sale contracts, the Company enters into exchange traded commodity futures and options contracts and over-the-counter forward and option contracts with various counterparties. These contracts are primarily traded via regulated commodity exchanges. The Company’s forward purchase and sales contracts are for physical delivery of the commodity in a future period. Contracts to purchase commodities from producers generally relate to the current or future crop years for delivery periods quoted by regulated commodity exchanges. Most contracts for the sale of commodities to processors or other commercial consumers generally do not extend beyond one year.

The Andersons, Inc. | Q3 2024 Form 10-Q | 9
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Most of these contracts meet the definition of derivatives. While the Company considers its commodity contracts to be effective economic hedges, the Company does not designate or account for its commodity contracts as hedges as defined under current accounting standards. The Company primarily accounts for its commodity derivatives at estimated fair value. The estimated fair value of the commodity derivative contracts that require the receipt or posting of cash collateral is recorded on a net basis (offset against cash collateral posted or received, also known as margin deposits) within commodity derivative assets or liabilities. Management determines fair value based on exchange-quoted prices and in the case of its forward purchase and sale contracts, estimated fair value is adjusted for differences in local markets and non-performance risk. For contracts for which physical delivery occurs, balance sheet classification is based on estimated delivery date. For futures, options and over-the-counter contracts in which physical delivery is not expected to occur but, rather, the contract is expected to be net settled, the Company classifies these contracts as current or noncurrent assets or liabilities, as appropriate, based on the Company’s expectations as to when such contracts will be settled.

Realized and unrealized gains and losses in the value of commodity contracts (whether due to changes in commodity prices, changes in performance or credit risk, or due to sale, maturity or extinguishment of the commodity contract) and commodity inventories are included in cost of sales and merchandising revenues.

Generally accepted accounting principles permit a party to a master netting arrangement to offset fair value amounts recognized for derivative instruments against the right to reclaim cash collateral or obligation to return cash collateral under the same master netting arrangement. The Company has master netting arrangements for its exchange traded futures and options contracts and certain over-the-counter contracts. When the Company enters into a future, option or an over-the-counter contract, an initial margin deposit may be required by the counterparty. The amount of the margin deposit varies by commodity. If the market price of a future, option or an over-the-counter contract moves in a direction that is adverse to the Company’s position, an additional margin deposit, called a maintenance margin, is required. The margin deposit assets and liabilities are included in short-term commodity derivative assets or liabilities, as appropriate, in the Condensed Consolidated Balance Sheets.

The following table presents a summary of the estimated fair value of the Company’s commodity derivative instruments that require cash collateral and the associated cash posted/received as collateral. The net asset or liability positions of these derivatives (net of their cash collateral) are determined on a counterparty-by-counterparty basis and are included within Condensed Consolidated Balance Sheets in Commodity derivative assets (liabilities) - current or if long-term in nature, Other assets, net or Other long-term liabilities:

(in thousands)September 30, 2024December 31, 2023September 30, 2023
Cash collateral paid $49,341 $24,439 $16,121 
Fair value of derivatives(10,199)24,237 38,203 
Net derivative asset position$39,142 $48,676 $54,324 

The following table presents, on a gross basis, current and non-current commodity derivative assets and liabilities:
September 30, 2024
(in thousands)Commodity Derivative Assets - CurrentCommodity Derivative Assets - NoncurrentCommodity Derivative Liabilities - CurrentCommodity Derivative Liabilities - NoncurrentTotal
Commodity derivative assets$154,042 $3,656 $11,207 $219 $169,124 
Commodity derivative liabilities(81,057)(96)(96,847)(1,916)(179,916)
Cash collateral paid 49,341 — — — 49,341 
Balance sheet line item totals$122,326 $3,560 $(85,640)$(1,697)$38,549 

December 31, 2023
(in thousands)Commodity Derivative Assets - CurrentCommodity Derivative Assets - NoncurrentCommodity Derivative Liabilities - CurrentCommodity Derivative Liabilities - NoncurrentTotal
Commodity derivative assets$201,542 $1,496 $7,868 $13 $210,919 
Commodity derivative liabilities(47,898)(64)(98,717)(431)(147,110)
Cash collateral paid 24,439 — — — 24,439 
Balance sheet line item totals$178,083 $1,432 $(90,849)$(418)$88,248 
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September 30, 2023
(in thousands)Commodity Derivative Assets - CurrentCommodity Derivative Assets - NoncurrentCommodity Derivative Liabilities - CurrentCommodity Derivative Liabilities - NoncurrentTotal
Commodity derivative assets$301,990 $4,730 $12,733 $101 $319,554 
Commodity derivative liabilities(78,516)(396)(155,244)(1,669)(235,825)
Cash collateral paid 16,121 — — — 16,121 
Balance sheet line item totals$239,595 $4,334 $(142,511)$(1,568)$99,850 

The net pretax gains and losses on commodity derivatives not designated as hedging instruments included in the Company’s Condensed Consolidated Statements of Operations and the line items in which they are located are as follows:

 Three months ended September 30,Nine months ended September 30,
(in thousands)2024202320242023
Losses on commodity derivatives included in Cost of sales and merchandising revenues$(87,774)$(26,918)$(74,600)$(49,659)

The Company's volumes of commodity derivative contracts outstanding (on a gross basis) are as follows:
September 30, 2024
(in thousands)Number of BushelsNumber of GallonsNumber of Tons
Non-exchange traded:
Corn562,754 — — 
Soybeans56,718 — — 
Wheat79,817 — — 
Oats27,851 — — 
Ethanol— 305,865 — 
Dried distillers grain— — 931 
Soybean meal— — 607 
Other4,073 83,847 2,056 
Subtotal731,213 389,712 3,594 
Exchange traded:
Corn185,750 — — 
Soybeans41,835 — — 
Wheat97,018 — — 
Oats1,165 — — 
Ethanol— 71,736 — 
Propane— 84,798 — 
Other— 2,016 1,432 
Subtotal325,768 158,550 1,432 
Total1,056,981 548,262 5,026 
The Andersons, Inc. | Q3 2024 Form 10-Q | 11
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December 31, 2023
(in thousands)Number of BushelsNumber of GallonsNumber of Tons
Non-exchange traded:
Corn519,825 — — 
Soybeans41,848 — — 
Wheat66,953 — — 
Oats15,355 — — 
Ethanol— 206,986 — 
Dried distillers grain— — 740 
Soybean meal— — 546 
Other6,847 37,153 1,882 
Subtotal650,828 244,139 3,168 
Exchange traded:
Corn160,795 — — 
Soybeans34,250 — — 
Wheat64,778 — — 
Oats375 — — 
Ethanol— 97,272 — 
Propane— 74,550 — 
Other— 420 825 
Subtotal260,198 172,242 825 
Total911,026 416,381 3,993 

September 30, 2023
(in thousands)Number of BushelsNumber of GallonsNumber of Tons
Non-exchange traded:
Corn546,004 — — 
Soybeans66,884 — — 
Wheat114,195 — — 
Oats24,712 — — 
Ethanol— 217,092 — 
Dried distillers grain— — 669 
Soybean meal— — 686 
Other9,734 26,632 2,295 
Subtotal761,529 243,724 3,650 
Exchange traded:
Corn158,900 — — 
Soybeans36,135 — — 
Wheat106,068 — — 
Oats1,865 — — 
Ethanol— 121,002 — 
Propane— 108,990 — 
Other— 672 779 
Subtotal302,968 230,664 779 
Total1,064,497 474,388 4,429 


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Interest Rate Derivatives

The Company’s objectives for using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt or payment of variable amounts with a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The gains or losses on the derivatives designated as hedging instruments are recorded in Other comprehensive income and subsequently reclassified into Interest expense, net in the same periods during which the hedged transaction affects earnings. Amounts reported in Accumulated other comprehensive income related to derivatives will be reclassified to Interest expense, net as interest payments are made on the Company’s variable-rate debt. In the case where interest rate derivatives are settled prior to maturity, the gain or loss is recorded in Other income, net within the Condensed Consolidated Statements of Operations.

The Company had recorded the following amounts for the fair value of the interest rate derivatives:

(in thousands)September 30, 2024December 31, 2023September 30, 2023
Derivatives designated as hedging instruments
Interest rate contracts included in Other current assets$6,000 $9,968 $12,026 
Interest rate contracts included in Other assets14,281 18,041 29,952 

The recording of gains and losses on the interest rate derivatives and the financial statement line in which they are located are as follows:
Three months ended September 30,Nine months ended September 30,
(in thousands)2024202320242023
Derivatives designated as hedging instruments
Interest rate derivative gains (losses) included in Other comprehensive income$(12,477)$7,981 $(7,754)$10,571 
Interest rate derivative gains (losses) included in Interest expense, net3,194 2,734 9,782 7,354 
Interest rate derivative gains included in Other income, net— — 568 — 
    

Outstanding interest rate derivatives, as of September 30, 2024, are as follows:
Interest Rate Hedging InstrumentYear EnteredYear of Maturity Notional Amount
(in millions)		Description


Interest Rate
Swap20192025$44.5 Interest rate component of debt - accounted for as a hedge2.4%
Swap20192025$89.1 Interest rate component of debt - accounted for as a hedge2.3%
Swap20192025$44.5 Interest rate component of debt - accounted for as a hedge2.4%
Swap20202030$50.0 Interest rate component of debt - accounted for as a hedge
0.0% to 0.8%
Swap20202030$50.0 Interest rate component of debt - accounted for as a hedge
0.0% to 0.8%
Swap20222025$20.0 Interest rate component of debt - accounted for as a hedge2.6%
Swap20222029$100.0 Interest rate component of debt - accounted for as a hedge2.0%
Swap20222029$50.0 Interest rate component of debt - accounted for as a hedge2.4%
Swap20232025$50.0 Interest rate component of debt - accounted for as a hedge3.7%
Swap20232031$50.0 Interest rate component of debt - accounted for as a hedge2.9%



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5. Revenue

Many of the Company’s sales and merchandising revenues are generated from contracts that are outside the scope of ASC 606, Revenue from Contracts with Customers. Specifically, the vast majority of the Company's Trade and Renewables sales contracts are derivatives within the scope of ASC 815, Derivatives and Hedging. Of the sales and merchandising revenues within the scope of ASC 606 in the Trade and Renewables segments, substantially all of the activity occurs at a point in time with de minimis outstanding contract liabilities. In the Company's Nutrient & Industrial segment, all sales and merchandising revenues are within the scope of ASC 606. Therefore, a further disaggregation of revenues and detail of outstanding contract balances have been provided below:
Three months ended September 30,Nine months ended September 30,
(in thousands)2024202320242023
Ag Supply Chain$68,614 $79,058 $374,727 $466,126 
Specialty Liquids24,114 23,282 132,422 149,886 
Engineered Granules35,339 26,193 139,574 122,055 
Total$128,067 $128,533 $646,723 $738,067 

The Nutrient & Industrial segment is organized into three divisions: Ag Supply Chain, which includes wholesale distribution centers and retail farm centers; Specialty Liquids, which includes manufactured liquid products intended for agricultural and industrial uses; and Engineered Granules, which includes granular products for turf and agricultural uses, contract manufacturing and cob products. Prior period amounts above were recast to conform to this organization.

Substantially all of the Nutrient & Industrial segment revenues presented in the preceding table occurred within the United States and are recorded at a point in time instead of over time.

Contract balances

The balances of the Nutrient & Industrial segment's contract liabilities were $15.6 million and $30.7 million as of September 30, 2024, and December 31, 2023, respectively. The difference between the opening and closing balances of the Company’s contract liabilities is primarily a result of timing differences between the Company’s performance and the customer’s payment. The main driver of the contract liabilities balance are payments for primary and specialty nutrients within the Nutrient & Industrial segment received in advance of fulfilling our performance obligations under our customer contracts. Due to the seasonality of this business, contract liabilities are built up through the first quarter in preparation for the spring application season. Revenue is then recognized in the throughout the spring application season as the Company fulfills its contract obligations which is why the balance is much lower in the current quarter when compared to December 31, 2023.


6. Income Taxes

Three months ended September 30,Nine months ended September 30,
(in thousands)2024202320242023
Income before income taxes$62,192 $38,385 $133,507 $77,802 
Income tax provision10,731 7,862 16,911 23,710 
Effective tax rate17.3 %20.5 %12.7 %30.5 %

On a quarterly basis, the Company estimates the effective tax rate expected to be applicable for the full year and makes changes, if necessary, based on new information or events. The estimated annual effective tax rate is forecasted based on actual historical information and forward-looking estimates and is used to provide for income taxes in interim reporting periods. The Company also recognizes the tax impact of certain unusual or infrequently occurring items, such as the effects of changes in tax laws or rates and impacts from settlements with tax authorities, discretely in the quarter in which they occur.

The difference between the 17.3% effective tax rate and the U.S. federal statutory tax rate of 21.0% for the three months ended September 30, 2024, is primarily attributable to the tax impact of noncontrolling interest and federal tax credits offset by state and local income taxes, tax impacts of foreign operations, nondeductible compensation, and changes in other discrete tax adjustments.

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The difference between the 20.5% effective tax rate and the U.S. federal statutory rate of 21.0% for the three months ended September 30, 2023, was primarily attributable to the tax impact of noncontrolling interest offset by state and local income taxes, nondeductible compensation, and other discrete tax adjustments.

The difference between the 12.7% effective tax rate and the U.S. federal statutory tax rate of 21.0% for the nine months ended September 30, 2024, is primarily attributable to the tax impact of noncontrolling interest, federal tax credits, stock-based compensation, and the reversal of certain unrecognized tax benefits offset by state and local income taxes, tax impacts of foreign operations, and nondeductible compensation.

The difference between the 30.5% effective tax rate and the U.S. federal statutory tax rate of 21.0% for the nine months ended September 30, 2023, was primarily attributable to the tax impact of noncontrolling interest, state and local income taxes, nondeductible compensation and other discrete tax adjustments. Other discrete tax items include a net income tax benefit of $10.6 million recorded on a net loss before taxes of $88.8 million related to the operations, impairment charge, and gain on deconsolidation associated with ELEMENT.


7. Accumulated Other Comprehensive Income

The following table summarizes the changes in accumulated other comprehensive income ("AOCI") attributable to the Company:
Three months ended September 30,Nine months ended September 30,
(in thousands)2024202320242023
Currency Translation Adjustment
Beginning balance$(7,464)$(4,767)$(2,581)$(8,203)
Other comprehensive income (loss) before reclassifications3,792 (2,600)(1,091)836 
  Tax effect— — — — 
Other comprehensive income (loss), net of tax3,792 (2,600)(1,091)836 
Ending balance$(3,672)$(7,367)$(3,672)$(7,367)
Hedging Adjustment
Beginning balance$24,534 $25,485 $20,985 $23,546 
Other comprehensive income (loss) before reclassifications(9,283)10,715 2,596 17,924 
Amounts reclassified from AOCI (a)
(3,194)(2,735)(10,350)(7,354)
  Tax effect (c)3,102 (2,007)1,928 (2,658)
Other comprehensive income (loss), net of tax(9,375)5,973 (5,826)7,912 
Ending balance$15,159 $31,458 $15,159 $31,458 
Pension and Other Postretirement Adjustment
Beginning balance$3,853 $4,506 $4,203 $4,883 
Other comprehensive income (loss) before reclassifications(59)(129)(49)(158)
Amounts reclassified from AOCI (b)
(228)(228)(684)(684)
  Tax effect (c)65 81 161 189 
Other comprehensive income (loss), net of tax(222)(276)(572)(653)
Ending balance$3,631 $4,230 $3,631 $4,230 
Investments in Convertible Preferred Securities Adjustment
Ending balance$258 $258 $258 $258 
Total AOCI Ending Balance$15,376 $28,579 $15,376 $28,579 
(a)Amounts reclassified from gain (loss) on cash flow hedges are reclassified from AOCI to income when the hedged item affects earnings. Gains and losses from interest rate derivatives are recognized in Interest expense, net as interest payments are made on the Company's variable rate debt. When interest rate derivatives are settled prior to maturity the gain or loss is recognized in Other income, net. See Note 5 for additional information.
(b)This accumulated other comprehensive loss component is included in the computation of net periodic benefit cost recorded in Operating, administrative and general expenses.
(c)The Company utilizes the aggregate approach for releasing disproportionate income tax effects in AOCI.
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8. Fair Value Measurements

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis:
(in thousands)September 30, 2024
Assets (liabilities)Level 1Level 2Level 3Total
Commodity derivatives, net (a)$39,142 $(593)$— $38,549 
Provisionally priced contracts (b)(24,870)(29,944)— (54,814)
Convertible preferred securities (c)— — 15,725 15,725 
Other assets and liabilities (d)6,226 20,281 — 26,507 
Total$20,498 $(10,256)$15,725 $25,967 
(in thousands)December 31, 2023
Assets (liabilities)Level 1Level 2Level 3Total
Commodity derivatives, net (a)$48,676 $39,572 $— $88,248 
Provisionally priced contracts (b)(108,736)(65,343)— (174,079)
Convertible preferred securities (c)— — 15,625 15,625 
Other assets and liabilities (d)5,477 28,009 — 33,486 
Total$(54,583)$2,238 $15,625 $(36,720)
(in thousands)September 30, 2023
Assets (liabilities)Level 1Level 2Level 3Total
Commodity derivatives, net (a)$54,324 $45,526 $— $99,850 
Provisionally priced contracts (b)(80,657)(24,460)— (105,117)
Convertible preferred securities (c)— — 20,628 20,628 
Other assets and liabilities (d)2,331 41,978 — 44,309 
Total$(24,002)$63,044 $20,628 $59,670 
(a)Includes associated cash posted/received as collateral.
(b)Included in "Provisionally priced contracts" are those instruments based only on underlying futures values (Level 1) and delayed price contracts (Level 2).
(c)Recorded in “Other assets, net” on the Company’s Condensed Consolidated Balance Sheets related to certain available for sale securities.
(d)Included in other assets and liabilities are assets held by the Company to fund deferred compensation plans and foreign exchange derivative contracts (Level 1), as well as interest rate derivatives (Level 2).

Level 1 commodity derivatives reflect the fair value of the exchanged-traded futures and options contracts that the Company holds, net of the cash collateral, that the Company has in its margin account.

The majority of the Company’s assets and liabilities measured at fair value are based on the market approach valuation technique. With the market approach, fair value is derived using prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

The Company’s net commodity derivatives primarily consist of futures or options contracts via regulated exchanges and contracts with producers or customers under which the future settlement date and bushels (or gallons in the case of ethanol contracts) of commodities to be delivered (primarily wheat, corn, soybeans and ethanol) are fixed and the price may or may not be fixed. Depending on the specifics of the individual contracts, the fair value is derived from the futures or options prices quoted on various exchanges for similar commodities and delivery dates as well as observable quotes for local basis adjustments (the difference, which is attributable to local market conditions, between the quoted futures price and the local cash price). Because “basis” for a particular commodity and location typically has multiple quoted prices from other agribusinesses in the same geographical vicinity and is used as a common pricing mechanism in the agribusiness industry, the Company has concluded that “basis” is typically a Level 2 fair value input for purposes of the fair value disclosure requirements related to our commodity derivatives, depending on the specific commodity. Although nonperformance risk, both of the Company and the counterparty, is present in each of these commodity contracts and is a component of the estimated fair values, based on the Company’s historical experience with its producers and customers and the Company’s knowledge of their businesses, the Company does not view nonperformance risk to be a significant input to fair value for these commodity contracts.


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These fair value disclosures exclude RMI which consists of agricultural commodity inventories measured at net realizable value. The net realizable value used to measure the Company’s agricultural commodity inventories is the fair value (spot price of the commodity in an exchange), less cost of disposal and transportation based on the local market. This valuation would generally be considered Level 2. The amount of RMI is disclosed in Note 2. Changes in the net realizable value of commodity inventories are recognized as a component of cost of sales and merchandising revenues.

Provisionally priced contract liabilities are those for which the Company has taken ownership and possession of grain, but the final purchase price has not been established. In the case of payables where the unpriced portion of the contract is limited to the futures price of the underlying commodity or the Company has delivered provisionally priced grain and a subsequent payable or receivable is set up for any future changes in the grain price, quoted exchange prices are used and the liability is deemed to be Level 1 in the fair value hierarchy. For all other unpriced contracts which include variable futures and basis components, the amounts recorded for delayed price contracts are determined on the basis of local grain market prices at the balance sheet date and, as such, are deemed to be Level 2 in the fair value hierarchy.

The convertible preferred securities are interests in several early-stage enterprises that may be in various forms, such as convertible debt or preferred equity securities.

A reconciliation of beginning and ending balances for the Company’s fair value measurements using Level 3 inputs is as follows:
Convertible Preferred Securities
(in thousands)20242023
Assets at January 1,$15,625 $16,278 
Gains included in Other income, net— 802 
Proceeds from investments— (1,670)
Assets at March 31,15,625 15,410 
Additional investments— 235 
Losses included in Other income, net— (221)
Assets at June 30,15,625 15,424 
Additional investments100 1,107 
Gains included in Other income, net— 4,919 
Reclassification to a receivable in Other assets, net— (822)
Assets at September 30,$15,725 $20,628 

The following summarize quantitative information about the Company's Level 3 fair value measurements:
Quantitative Information about Recurring Level 3 Fair Value Measurements
Fair Value as of
(in thousands)September 30, 2024December 31, 2023September 30, 2023Valuation MethodUnobservable InputWeighted Average
Convertible preferred securities (a)$15,725 $15,625 $20,628 Implied based on market pricesN/AN/A
(a) The Company considers observable price changes and other additional market data available to estimate fair value, including additional capital raising, internal valuation models, progress towards key business milestones, and other relevant market data points.
There were no nonrecurring level 3 fair value measurements as of September 30, 2024, December 31, 2023, or September 30, 2023.

The fair value of the Company’s cash equivalents, accounts receivable and accounts payable approximate their carrying value as they are close to maturity.

As of September 30, 2024, December 31, 2023 and September 30, 2023, the estimated fair value of long-term debt, including the current portion, was $567.5 million, $585.1 million, and $585.2 million, respectively. The Company estimates the fair value of its long-term debt based upon the Company’s credit standing and current interest rates offered to the Company on similar bonds and rates currently available to the Company for long-term borrowings with similar terms and remaining maturities.



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9. Related Parties

In the ordinary course of business, and on an arm's length basis, the Company will enter into related party transactions with the minority shareholder of the Company's Renewables operations and certain equity method investments that the Company holds, along with other related parties.

The following table sets forth the related party transactions entered into for the time periods presented:
Three months ended September 30,Nine months ended September 30,
(in thousands)2024202320242023
Sales of products$103,736 $98,062 $236,038 $270,112 
Purchases of products14,986 9,061 31,242 39,286 

(in thousands)September 30, 2024December 31, 2023September 30, 2023
Accounts receivable$10,327 $6,732 $13,706 
Accounts payable4,633 3,901 4,697 


10. Segment Information

The Company’s operations include three reportable business segments that are distinguished primarily on the basis of products and services offered as well as the structure of management. The Trade business includes commodity merchandising and the operation of terminal grain elevator facilities. The Renewables business produces ethanol and co-products through its four co-owned and consolidated ethanol production facilities as well as purchases and sells ethanol and ethanol co-products. The Nutrient & Industrial business manufactures and distributes plant nutrient products such as agricultural inputs, primarily fertilizers and turf care products along with industrial products such as deicers, dust abatement solutions and corncob-based products. The Other category includes other corporate level costs not attributable to an operating segment and intercompany eliminations between the segments.

The segment information below includes the allocation of expenses shared by one or more operating segments. Although management believes such allocations are reasonable, the operating information does not necessarily reflect how such data might appear if the segments were operated as separate businesses. The Company does not have any customers who represent 10 percent or more of total revenues.
 Three months ended September 30,Nine months ended September 30,
(in thousands)2024202320242023
Revenues from external customers
Trade$1,747,715 $2,639,059 $5,399,315 $8,213,649 
Renewables745,206 868,099 2,088,372 2,585,396 
Nutrient & Industrial128,067 128,533 646,723 738,067 
Total$2,620,988 $3,635,691 $8,134,410 $11,537,112 

 Three months ended September 30,Nine months ended September 30,
(in thousands)2024202320242023
Income (loss) before income taxes
Trade$26,266 $8,073 $37,615 $52,427 
Renewables (a)52,583 47,096 114,574 31,187 
Nutrient & Industrial(6,132)(8,452)15,437 23,675 
Other(10,525)(8,332)(34,119)(29,487)
Total$62,192 $38,385 $133,507 $77,802 
(a) Includes Net income attributable to noncontrolling interests of $24.1 million and $20.8 million for the three months ended September 30, 2024, and 2023, respectively, and $47.7 million and $4.1 million for the nine months ended September 30, 2024, and 2023, respectively.



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11. Commitments and Contingencies

The Company is party to litigation, or threats thereof, both as defendant and plaintiff with some regularity, although individual cases that are material in size occur infrequently. As a defendant, the Company establishes reserves for claimed amounts that are considered probable and capable of estimation. If those cases are resolved for lesser amounts, the excess reserves are taken into income and, conversely, if those cases are resolved for larger than the amount the Company has accrued, the Company records additional expense. The Company believes it is unlikely that the results of its current legal proceedings for which it is the defendant, even if unfavorable, will be material. As a plaintiff, amounts that are collected can also result in sudden, non-recurring income.

Litigation results depend upon a variety of factors, including the availability of evidence, the credibility of witnesses, the performance of counsel, the state of the law, and the impressions of judges and jurors, any of which can be critical in importance, yet difficult, if not impossible, to predict. Consequently, cases currently pending, or future matters, may result in unexpected, and non-recurring losses, or income, from time to time. Finally, litigation results are often subject to judicial reconsideration, appeal and further negotiation by the parties, and as a result, the final impact of a particular judicial decision may be unknown for some time or may result in continued reserves to account for the potential of such post-verdict actions.

The estimated losses for outstanding claims that are considered reasonably possible are not material.


12. Other Income, net

The following table sets forth the items in Other income, net within the Condensed Consolidated Statements of Operations:
Three months ended September 30,Nine months ended September 30,
(in thousands)2024202320242023
Interest income$8,141 $3,296 $16,535 $6,471 
Property insurance recoveries5,204 — 5,204 3,183 
Patronage income— 951 3,406 3,046 
Gain on deconsolidation of joint venture— — 3,117 6,544 
Gain on sale of assets and businesses— 6,515 — 5,836 
Gain on investments— 4,798 — 5,144 
Other577 (382)2,389 5,399 
Total$13,922 $15,178 $30,651 $35,623 

Individually significant items included in the table above are:

Interest income - The vast majority of interest income recorded by the Company was due to the amount of cash and cash equivalents on hand in all periods presented.

Property insurance recoveries - In 2024, property insurance recoveries consisted of $5.0 million related to a grain bin collapse at an Indiana grain facility in a prior year. In 2023, property insurance recoveries consisted of several individually insignificant amounts in the ordinary course of business.

Patronage income - As a part of the Company’s normal operations it relies on short-term lines of credit to support working capital needs in addition to long-term debt. The Company receives patronage income from its lenders as a part of these programs.

Gain on deconsolidation of joint venture - On April 18, 2023, ELEMENT was placed into receivership. As the receiver took control of ELEMENT, under the VIE consolidation model, the Company was deemed to have lost control of the entity and therefore deconsolidated ELEMENT from its Condensed Consolidated Financial Statements. As a result of these activities, the Company recognized a gain on deconsolidation in the second quarter of 2023. The Company recognized an additional $3.1 million gain in the first quarter of 2024 as the amount of cash distributed to the Company related to its receivables from ELEMENT exceeded management's estimate at the time of deconsolidation.

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Gain on sale of assets and businesses - In 2023, the vast majority of the gain was from the sale of a Nebraska grain facility of $5.6 million, with the remaining amounts consisting of several individually insignificant amounts in the ordinary course of business.

Gain on investments - In 2023, the gain on investments consisted of a $4.8 million revaluation gain of an investment within the Company's corporate venture fund. The remaining gains consists of individually insignificant activity in the ordinary course of business.


13. Subsequent Events

On November 1, 2024, the Company purchased an ownership interest in Skyland Grain, LLC ("Skyland"), which operates grain receiving and agronomy facilities in Kansas, Oklahoma, Colorado, and Texas. The transaction enables the Company to expand its core grain and fertilizer businesses across strategic markets. The Company will own 65% of Skyland's equity and will result in the consolidation of Skyland’s results in the Company's Consolidated Financial Statements within the Trade and Nutrient & Industrial segments. The Company purchased its ownership interest in Skyland for $85.0 million in cash, subject to customary working capital adjustments, and was financed by cash on hand.

The Company will apply the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations, to account for the transaction and expect to record any purchase price accounting adjustments in the fourth quarter of 2024. The Company will record the assets acquired and liabilities assumed at their fair values as of the acquisition date. Due to the limited time since the closing of the acquisition, the valuation efforts and related acquisition accounting is incomplete at the time of the filing of these unaudited Condensed Consolidated Financial Statements. As a result, the Company is unable to provide amounts recognized as of the acquisition date for major classes of assets and liabilities acquired, including goodwill and other intangible assets.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

The following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contains forward-looking statements which relate to future events or future financial performance and involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by these forward-looking statements. Such factors include, but are not limited to, the effects of economic, weather and agricultural conditions, regulatory conditions, competition globally and in the markets the Company serves, geopolitical risk, fluctuations in cost and availability of commodities, the effectiveness of the Company's internal control over financial reporting and the unpredictability of existing and possible future litigation. However, it is not possible to predict or identify all such factors. The reader is urged to carefully consider these risks and others, including those risk factors listed under Item 1A of the 2023 Form 10-K. In some cases, the reader can identify forward-looking statements by terminology such as may, anticipates, believes, estimates, predicts, or the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially. These forward-looking statements relate only to events as of the date on which the statements are made and the Company undertakes no obligation, other than any imposed by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Although management believes that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

Critical Accounting Policies and Estimates

Our critical accounting policies and critical accounting estimates, as described in our 2023 Form 10-K, have not materially changed through the third quarter of 2024.

Executive Overview

Our operations are organized, managed and classified into three reportable business segments: Trade, Renewables and Nutrient & Industrial. Each of these segments is generally based on the nature of products and services offered and aligns with the management structure.

The agricultural commodity-based business is one in which changes in selling prices generally move in relationship to changes in purchase prices. Therefore, increases or decreases in prices of the agricultural commodities that the business deals in will have a relatively equal impact on sales and merchandising revenues and cost of sales and merchandising revenues and a much less significant impact on gross profit. As a result, changes in sales and merchandising revenues and cost of sales and merchandising revenues between periods may not necessarily be indicative of the overall performance of the business and greater emphasis should be placed on changes in gross profit.

Trade

The Trade segment’s third quarter operating results were ahead of the prior year. Results from our grain asset footprint improved when compared to the prior year, due to strong elevation margins and space income. Trade's growing specialty food and feed ingredients business continued to benefit from recent growth investments. The merchandising business remained profitable with well-supplied commodity markets and limited volatility. Prior year results also included a $19 million pretax foreign currency loss in Egypt. As expected, farmer engagement ramped up during the quarter to bring significant old crop bushels to market and forward sell new crop in anticipation of an early and robust harvest.

The portfolio mix of assets, ingredients, and merchandising businesses provides a solid foundation for us to benefit from large crops and carry markets, as well as tight, demand-driven markets. Assets are well-positioned for the anticipated early and large harvest, which should allow Trade to purchase grains at low basis levels. Domestic specialty ingredient demand is also expected to stay solid and should continue to support recent capital growth investments.

Agricultural inventories on hand were 113.2 million and 91.4 million bushels at September 30, 2024, and September 30, 2023, respectively. These bushels consist of inventory held at company-owned or leased facilities, transload inventory, in-transit inventory, and third-party held inventory. Total Trade storage space capacity at company-owned or leased facilities, including temporary pile storage, was approximately 170 million bushels at September 30, 2024, which is consistent with the prior year.


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Renewables

The Renewables segment's solid third quarter operating results were slightly improved when compared to the prior year. Margins on ethanol production improved year-over-year on significantly lower corn basis in the eastern plants, despite a reduction in ethanol board crush margins in the quarter. Production facilities continued to operate efficiently in the quarter with increased volume and higher ethanol yields. Plant co-product values were lower, with feed ingredients following the overall price reduction of corn despite improved demand. Renewable diesel feedstock volumes continue to grow albeit with compressed margins on industry fundamentals. All four plants completed their semi-annual maintenance shutdowns in the third quarter. A favorable ethanol margin environment should continue, supported by exports, higher blending rates and lower corn basis levels in the east.

Ethanol and related co-products volumes were as follows:
Three months ended September 30,Nine months ended September 30,
(in thousands)2024202320242023
Ethanol (gallons shipped)212,336 190,368 585,213 575,567 
E-85 (gallons shipped)12,142 11,786 37,927 30,867 
Vegetable oils (pounds shipped) (a)
415,505 343,619 1,191,077 908,976 
DDG (tons shipped) (b)
636 497 1,737 1,534 
(a) Includes corn oil, soybean oil, and other fats, oils, and greases.
(b) Dried distillers grains ("DDG") tons shipped converts wet tons to a dry ton equivalent amount.

Nutrient & Industrial

The Nutrient & Industrial segment's third quarter operating results improved from the prior year. Overall volumes improved during a seasonally slow third quarter, but margins in base nutrients have reset to more normalized levels and did not repeat outsized margin opportunities seen in recent years. The engineered granules business saw significant improvement in the quarter on higher sales volume and margins, as the Company has continued to focus on operational improvements in this business. Looking forward, the fourth quarter should benefit from high yields and an early harvest, allowing for fall applications, dependent on grower sentiment.

Storage capacity at our Ag Supply Chain and Specialty Liquids facilities, including leased storage, was approximately 457 thousand tons for dry nutrients and approximately 511 thousand tons for liquid nutrients at September 30, 2024, which is similar to the prior year.

Tons of product sold were as follows:
Three months ended September 30,Nine months ended September 30,
(in thousands)2024202320242023
Ag Supply Chain205 209 982 1,053 
Specialty Liquids62 59 270 282 
Engineered Granules39 25 161 134 
Total tons306 293 1,413 1,469 

In the table above, Ag Supply Chain represents facilities principally engaged in the wholesale distribution and retail sale and application of primary agricultural nutrients such as bulk nitrogen, phosphorus, and potassium. Specialty Liquid locations produce and sell a variety of low-salt liquid starter fertilizers, micronutrients for agricultural use, and specialty products for use in various industrial processes. Engineered Granules include a variety of corncob-based products and facilities that primarily manufacture granulated dry products for use in specialty turf and agricultural applications.

Other

Our “Other” activities include corporate income and expense and cost for functions that provide support and services to the operating segments. The results include expenses and benefits not allocated to the operating segments and other elimination and consolidation adjustments.


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Operating Results

The following discussion focuses on the operating results as shown in the Condensed Consolidated Statements of Operations and includes a separate discussion by segment. Additional segment information is included herein in Note 10, Segment Information.

Comparison of the three months ended September 30, 2024, with the three months ended September 30, 2023, including a reconciliation of GAAP to non-GAAP measures:
 Three months ended September 30, 2024
(in thousands)TradeRenewablesNutrient & IndustrialOtherTotal
Sales and merchandising revenues$1,747,715 $745,206 $128,067 $— $2,620,988 
Cost of sales and merchandising revenues1,648,939 684,831 110,093 — 2,443,863 
Gross profit98,776 60,375 17,974 — 177,125 
Operating, administrative and general expenses75,825 8,839 24,591 11,239 120,494 
Interest expense (income), net5,405 713 2,838 (595)8,361 
Other income (loss), net8,720 1,760 3,323 119 13,922 
Income (loss) before income taxes$26,266 $52,583 $(6,132)$(10,525)$62,192 
Income before income taxes attributable to the noncontrolling interests— 24,096 — — 24,096 
Non-GAAP Income (loss) before income taxes attributable to the Company$26,266 $28,487 $(6,132)$(10,525)$38,096 

 Three months ended September 30, 2023
(in thousands)TradeRenewablesNutrient & IndustrialOtherTotal
Sales and merchandising revenues$2,639,059 $868,099 $128,533 $— $3,635,691 
Cost of sales and merchandising revenues2,553,062 815,054 109,874 — 3,477,990 
Gross profit85,997 53,045 18,659 — 157,701 
Operating, administrative and general expenses79,247 8,332 26,233 12,494 126,306 
Interest expense (income), net6,515 963 1,484 (774)8,188 
Other income, net7,838 3,346 606 3,388 15,178 
Income (loss) before income taxes$8,073 $47,096 $(8,452)$(8,332)$38,385 
Income before income taxes attributable to the noncontrolling interests— 20,815 — — 20,815 
Non-GAAP Income (loss) before income taxes attributable to the Company$8,073 $26,281 $(8,452)$(8,332)$17,570 


The Company uses Income (loss) before income taxes attributable to the Company, a non-GAAP financial measure as defined by the Securities and Exchange Commission, to evaluate the Company’s financial performance. This performance measure is not defined by accounting principles generally accepted in the United States and should be considered in addition to, and not in lieu of, GAAP financial measures. Management believes that Income (loss) before income taxes attributable to the Company is a useful measure of the Company’s performance as it provides investors additional information about the Company's operations, allowing evaluation of underlying business performance and period-to-period comparability. This measure is not intended to replace or be an alternative to Income (loss) before income taxes, the most directly comparable measure reported under GAAP.


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Trade

Operating results for the Trade segment improved from the same period of the prior year. Sales and merchandising revenues decreased by $891.3 million and cost of sales and merchandising revenues decreased by $904.1 million resulting in increased gross profit of $12.8 million. A majority of the decrease in sales and merchandising revenues and cost of sales and merchandising revenues can be attributed to reduced commodity prices across all of our business lines as the oversupply of commodities has shifted to a carry market. The remainder of the decrease from the prior year can be attributed to management making a prudent decision to intentionally pull back on volumes traded in certain regions due to the recent geopolitical unrest. The $12.8 million increase in gross profit can be attributed to a $17.2 million improvement in the international merchandising business as currency liquidity issues in Egypt impacted results in the prior period. Our asset-based business realized strong elevation margins and space income in the current carry market and our specialty ingredients business continues to perform well, realizing the benefits of its recent acquisition and other growth investments.

Operating, administrative and general expenses decreased by $3.4 million. Substantially all of the decrease from the prior year can be attributed to decreased incentives.

Interest expense decreased by $1.1 million due to reduced short-term borrowings from lower commodity prices.

Renewables

Operating results for the Renewables segment increased by $2.2 million from the same period last year. Sales and merchandising revenues decreased by $122.9 million and cost of sales and merchandising revenues decreased by $130.2 million compared to prior year results. As a result, gross profit increased by $7.3 million compared to 2023 results. The decrease in both sales and merchandising revenues and cost of sales and merchandising revenues can be attributed to 23% lower ethanol prices, a similar reduction in DDG prices, and declines in values across the various renewable diesel feedstocks. Sales volumes remained consistent for the base ethanol business and increased in our feed and renewable diesel feedstocks products by 30% and 21%, respectively. The $7.3 million increase to gross profit in the current period results reflect a $10.1 million increase at the ethanol plants from efficient production combined with strong ethanol margins. The improved gross profit performance at the ethanol plants was partially offset by lower results in the third-party trading business on compressed margins despite higher sales volumes.

Other income, net decreased from the prior year by $1.6 million due to $2.2 million in USDA Biofuel Producer Program proceeds received in the third quarter of 2023 that did not recur.

Nutrient & Industrial

Operating results for the Nutrient & Industrial segment increased by $2.3 million compared to the same period in the prior year. Sales and merchandising revenues and cost of sales and merchandising revenues were flat from the prior year resulting in gross profit largely consistent with the prior year. Although overall gross profit was flat, our Ag Supply Chain business fell short of the prior year by $6.6 million due to a weaker margin environment as margins dropped approximately 50% from outsized levels in the prior year. This gross profit shortfall was almost entirely offset by the improved performance in our Engineered Granules and Specialty liquids businesses as both margins and volumes improved.

Operating, administrative and general expenses decreased from the prior year by $1.6 million mainly due to $1.2 million of reduced incentives from lower operating results.

Other income, net increased by $2.7 million in which substantially all of the increase from prior year was related to interest income from cash on hand.

Other

Results for the quarter declined by $2.2 million compared to the same period in the prior year. The decrease from the prior year was primarily driven by a $4.8 million revaluation gain of a cost method investment in the prior year which was partially offset by lower incentive compensation in the current year.


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Income Taxes

For the three months ended September 30, 2024, the Company recorded income tax expense of $10.7 million. The Company's effective tax rate was 17.3% on income before taxes of $62.2 million. The difference between the 17.3% effective tax rate and the U.S. federal statutory tax rate of 21% is primarily attributable to the tax impact of noncontrolling interest and federal tax credits offset by state and local income taxes, tax impacts of foreign operations, nondeductible compensation, and changes in other discrete tax adjustments.

For the three months ended September 30, 2023, the Company recorded income tax expense of $7.9 million. The Company's effective tax rate was 20.5% on income of $38.4 million. The difference between the 20.5% effective tax rate and the U.S. federal statutory tax rate of 21.0% was primarily attributable to the tax impact of noncontrolling interest offset by state and local income taxes, nondeductible compensation, and other discrete tax adjustments.

Comparison of the nine months ended September 30, 2024, with the nine months ended September 30, 2023, including a reconciliation of GAAP to non-GAAP measures:
 Nine months ended September 30, 2024
(in thousands)TradeRenewablesNutrient & IndustrialOtherTotal
Sales and merchandising revenues$5,399,315 $2,088,372 $646,723 $— $8,134,410 
Cost of sales and merchandising revenues5,142,609 1,954,700 556,285 — 7,653,594 
Gross profit256,706 133,672 90,438 — 480,816 
Operating, administrative and general expenses220,886 24,592 75,427 35,561 356,466 
Interest expense (income), net16,492 2,192 4,454 (1,644)21,494 
Other income (loss), net18,287 7,686 4,880 (202)30,651 
Income (loss) before income taxes$37,615 $114,574 $15,437 $(34,119)$133,507 
Income before income taxes attributable to the noncontrolling interests— 47,674 — — 47,674 
Non-GAAP Income (loss) before income taxes attributable to the Company$37,615 $66,900 $15,437 $(34,119)$85,833 
 Nine months ended September 30, 2023
(in thousands)TradeRenewablesNutrient & IndustrialOtherTotal
Sales and merchandising revenues$8,213,649 $2,585,396 $738,067 $— $11,537,112 
Cost of sales and merchandising revenues7,929,763 2,448,256 631,444 — 11,009,463 
Gross profit283,886 137,140 106,623 — 527,649 
Operating, administrative and general expenses220,373 24,804 79,251 35,120 359,548 
Asset impairment— 87,156 — — 87,156 
Interest expense (income), net29,235 5,648 5,649 (1,766)38,766 
Other income, net18,149 11,655 1,952 3,867 35,623 
Income (loss) before income taxes$52,427 $31,187 $23,675 $(29,487)$77,802 
Loss before income taxes attributable to the noncontrolling interests— 4,088 — — 4,088 
Non-GAAP Income (loss) before income taxes attributable to the Company$52,427 $27,099 $23,675 $(29,487)$73,714 

The Company uses Income (loss) before income taxes attributable to the Company, a non-GAAP financial measure as defined by the Securities and Exchange Commission, to evaluate the Company’s financial performance. This performance measure is not defined by accounting principles generally accepted in the United States and should be considered in addition to, and not in lieu of, GAAP financial measures. Management believes that Income (loss) before income taxes attributable to the Company is a useful measure of the Company’s performance as it provides investors additional information about the Company's operations, allowing evaluation of underlying business performance and period-to-period comparability. This measure is not intended to replace or be an alternative to Income (loss) before income taxes, the most directly comparable amounts reported under GAAP.
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Trade

Operating results for the Trade segment decreased by $14.8 million from the prior year. Sales and merchandising revenues decreased by $2,814.3 million, and cost of sales and merchandising revenues decreased by $2,787.2 million for a decreased gross profit impact of $27.2 million. A majority of the decrease in sales and merchandising revenues and cost of sales and merchandising revenues can be attributed to reduced commodity prices across all of our business lines as the oversupply of commodities has shifted to a carry market. The remainder of the decrease from the prior year can be attributed to management making a prudent decision to intentionally pull back on volumes traded in certain regions due to the recent geopolitical unrest. Of the $27.2 million decrease in gross profit, $20.3 million was related to damaged inventory insurance recoveries recorded in the prior year within the asset-based business. This was followed by a $14.7 million decrease in the merchandising businesses as there were less trading opportunities in a less volatile commodity market, which was partially offset by $6.6 million of improved results in our specialty ingredients business as recent acquisitions and growth investments were accretive to results.

Interest expense decreased by $12.7 million due to reduced short-term borrowings from lower commodity prices.

Renewables

Operating results for Renewables increased by $39.8 million from the same period of prior year. Sales and merchandising revenues decreased by $497.0 million, and cost of sales and merchandising revenues decreased by $493.6 million compared to prior year. As a result, gross profit decreased by $3.5 million. The decrease in both sales and merchandising revenues and cost of sales and merchandising revenues can be attributed to 26% lower ethanol prices, a similar reduction in DDG prices, and declines in values across the various renewable diesel feedstocks. Sales volumes remained consistent for the base ethanol business and increased in our feed and renewable diesel feedstocks products by 16% and 31%, respectively. The $3.5 million decrease in gross profit from the prior period can mainly be attributed to margin compression in our third-party trading business.

An asset impairment charge of $87.2 million related to ELEMENT was recorded in the prior year. As ELEMENT was a consolidated subsidiary of the Company at the time, the entire impairment charge is reflected in Asset impairment.

Interest expense decreased by $3.5 million from the prior year, of which $2.2 million of the decrease was due to the deconsolidation of ELEMENT non-recourse debt with the remainder due to lower working capital usage.

Other income, net decreased from the prior year by $4.0 million as the Company recorded an additional $3.4 million in gains as a result of the deconsolidation of the ELEMENT ethanol plant in the prior year.

Nutrient & Industrial

Operating results for the Nutrient & Industrial segment decreased by $8.2 million when compared to the same period of the prior year. Sales and merchandising revenues decreased $91.3 million, and cost of sales and merchandising revenues decreased by $75.2 million resulting in decreased gross profit of $16.2 million. Over 90% of the decrease in sales and merchandising revenues and cost of sales and merchandising revenues was due to margin compression as the prior year experienced outsized pricing opportunities in the spring application season. Specifically, our Ag Supply Chain business was impacted the most by a lower price environment and reduced volumes from a wet and delayed spring application season, as it contributed $13.1 million of the $16.2 million gross profit shortfall when compared to the outsized prior year results.

Interest expense decreased $1.2 million from prior year due to lower working capital usage.

Other income, net increased by $2.9 million in which substantially all of the increase from prior year was related to interest income from cash on hand.

Other

Results for the quarter decreased by $4.6 million compared to the same period in the prior year due to a $4.8 million revaluation gain of a cost method investment in the prior year.


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Income Taxes

For the nine months ended September 30, 2024, the Company recorded income tax expense of $16.9 million. The Company's effective tax rate was 12.7% on income before taxes of $133.5 million. The difference between the 12.7% effective tax rate and the U.S. federal statutory tax rate of 21.0% is primarily attributable to the tax impact of noncontrolling interest, federal tax credits, stock-based compensation, and the reversal of certain unrecognized tax benefits offset by state and local income taxes, tax impacts of foreign operations, and nondeductible compensation.

For the nine months ended September 30, 2023, the Company recorded an income tax expense of $23.7 million. The Company’s effective tax rate was 30.5% on income before income taxes of $77.8 million. The difference between the 30.5% effective tax rate and the U.S. federal statutory rate of 21.0% is primarily attributable to the tax impact of noncontrolling interest, state and local income taxes, and nondeductible compensation, and other discrete tax adjustments. Other discrete tax adjustments include a net income tax benefit of $10.6 million, recorded on a net loss before taxes of $88.8 million related to the operations, impairment charge, and gain on deconsolidation associated with ELEMENT.

The Company’s subsidiary partnership returns are under U.S. federal and certain state tax examinations for tax years 2018 through 2022. The Company’s subsidiary is under federal tax examination by the Mexican tax authorities for tax year 2015. The U.S. federal, state, and Mexican tax authorities’ examinations could potentially be resolved within the next 12 months. The resolution of these examinations could change our unrecognized tax benefits and favorably impact income tax expense by a range of $5.7 million to $10.1 million.

On December 20, 2021, the Organization for Economic Co-operation and Development ("OECD") issued Pillar Two model rules introducing a global minimum tax of 15% on large corporations. Although the U.S. has not yet adopted the Pillar Two model rules, several foreign countries enacted legislation in 2023 which closely follow OECD’s Pillar Two guidance to be effective January 1, 2024. The impact of Pillar Two legislation on the Company's 2024 effective tax rate is expected to be minimal. Management will continue to monitor Pillar Two legislation in our relevant jurisdictions to determine any changes to the Company's effective tax rate.

Liquidity and Capital Resources

Working Capital
At September 30, 2024, the Company had working capital of $1,153.2 million, an increase of $33.7 million from the prior year. This increase was attributable to changes in the following components of current assets and current liabilities:

(in thousands)September 30, 2024September 30, 2023Variance
Current Assets:
Cash and cash equivalents$454,065 $418,055 $36,010 
Accounts receivable, net756,618 816,686 (60,068)
Inventories884,339 985,292 (100,953)
Commodity derivative assets – current122,326 239,595 (117,269)
Other current assets113,726 67,471 46,255 
Total current assets2,331,074 2,527,099 (196,025)
Current Liabilities:
Short-term debt14,716 14,138 578 
Trade and other payables774,347 822,153 (47,806)
Customer prepayments and deferred revenue67,899 211,867 (143,968)
Commodity derivative liabilities – current85,640 142,511 (56,871)
Current maturities of long-term debt27,727 27,535 192 
Accrued expenses and other current liabilities207,543 189,430 18,113 
Total current liabilities1,177,872 1,407,634 (229,762)
Working Capital$1,153,202 $1,119,465 $33,737 


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Current assets as of September 30, 2024, decreased $196.0 million in comparison to those as of September 30, 2023. This decrease related to the reduction of all current asset accounts with the exception of the increase in cash and other current assets. The decreases in these current asset accounts can largely be attributed to the reduction and stabilization of agricultural commodity prices over the last year in comparison to historically high price levels of agricultural commodities, including fertilizer, in the same period of the prior year. The decreases in the working capital asset accounts also had a direct impact on cash as the Company was not deploying cash to hold working capital as it had done in the previous year.

Current liabilities decreased $229.8 million from the prior year. Current liabilities have decreased in trade payables, customer prepayments and deferred revenue, and commodity derivative liabilities as commodity prices have continued to stabilize over the last year compared to the historically high commodity prices in the same period of the prior year.

Sources and Uses of Cash
Nine months ended September 30,
(in thousands)20242023
Net cash provided by operating activities$62,695 $696,087 
Net cash used in investing activities(90,592)(117,263)
Net cash used in financing activities(162,595)(275,846)

Operating Activities
Operating activities provided cash of $62.7 million and $696.1 million in the first nine months of 2024 and 2023, respectively. The decrease in the amount of cash provided in operating activities is mainly due to an unfavorable change of $620.4 million in operating assets and liabilities through the normal course of business. Cash generation excluding working capital changes remains consistent and strong in changing markets.

Investing Activities
Investing activities used cash of $90.6 million through the first nine months of 2024 compared to $117.3 million in the prior period. Cash used in investing activities decreased from the prior year mainly due to reduced capital spending combined with $14.8 million in reduced spending on business acquisitions in the current year.
We expect to invest approximately $150 million in property, plant, and equipment in 2024, depending on project timing. Approximately 50% of capital spending will be to maintain current facilities.

Financing Activities
Financing activities used cash of $162.6 million and $275.8 million for the nine months ended September 30, 2024, and 2023, respectively. This decrease in cash used from the prior year is mainly due to the change in the Company's borrowings on its short-term credit facility as the Company had sufficient cash on hand in 2024 to cover a large amount of settled payables and other changes in working capital.

The Company paid $19.5 million in dividends in the first nine months of 2024 compared to $18.8 million paid in the prior period. The Company paid dividends of $0.19 and $0.185 per common share in January, April, and July of 2024 and 2023, respectively. On August 15, 2024, the Company declared a cash dividend of $0.19 per common share payable on October 22, 2024, to shareholders of record on October 1, 2024.

The Company is party to borrowing arrangements with a syndicate of banks that provide a total of $1,859.4 million in borrowing capacity. As of September 30, 2024, the Company had $1,841.0 million available for borrowing.

Certain of our long-term borrowings include covenants that, among other things, impose minimum levels of working capital and various debt leverage ratios. The Company is in compliance with all covenants as of September 30, 2024. In addition, certain of our long-term borrowings are collateralized by mortgages on various facilities.

The Company is typically in a net short-term borrowing position in the first two quarters of the year. The majority of these short-term borrowings bear interest at variable rates, and an increase in interest rates could have a significant impact on our profitability. In addition, periods of high grain prices could require us to make additional margin deposits on our exchange traded futures contracts. Conversely, in periods of declining prices, the Company could receive a return of cash.
Management believes the Company's sources of liquidity will be adequate to fund operations, capital expenditures and service indebtedness. At September 30, 2024, the Company had standby letters of credit outstanding of $3.7 million.
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Item 3. Quantitative and Qualitative Disclosures about Market Risk

For further information, refer to our Annual Report on Form 10-K for the year ended December 31, 2023. There were no material changes in market risk, specifically commodity and interest rate risk during the nine months ended September 30, 2024.


Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures
Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act were effective as of September 30, 2024, to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the third quarter of 2024, identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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Part II. Other Information

Item 1. Legal Proceedings

The Company is subject to legal proceedings and claims that have not been fully resolved and that have arisen in the ordinary course of business. Refer to Part I, Item 1 of this Form 10-Q in the Notes to Condensed Consolidated Financial Statements in Note 11, “Commitments and Contingencies,” In the opinion of management, there was not at least a reasonable possibility the Company may have incurred a material loss, or a material loss greater than a recorded accrual, concerning loss contingencies for asserted legal and other claims.

The outcome of litigation is inherently uncertain. If one or more legal matters were resolved against the Company in a reporting period for amounts above management’s expectations, the Company’s financial condition and operating results for that reporting period could be materially adversely affected.


Item 1A. Risk Factors

The business, financial condition and operating results of the Company can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in Part I, Item 1A of the 2023 Form 10-K under the heading “Risk Factors,” any one or more of which could, directly or indirectly, cause the Company’s actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect the Company’s business, financial condition, operating results and stock price.


Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

PeriodsTotal Number of Shares Purchased (a)Average Price Paid Per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (b)
July 2024
— $— — $100,000,000 
August 2024
— — — 100,000,000 
September 2024
604 50.97 — 100,000,000 
Total604 $50.97 — $100,000,000 
(a) During the three months ended September 30, 2024, the Company acquired shares of common stock held by employees who tendered owned shares to satisfy tax withholding obligations.
(b) As of August 15, 2024, the Company was authorized to purchase up to $100 million of the Company’s common stock (the "Repurchase Plan") on or before August 15, 2027. As of September 30, 2024, none of the $100 million available to repurchase shares had been utilized. The Repurchase Plan does not obligate the Company to acquire any specific number of shares. Under the Repurchase Plan, shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act.


Item 5. Other Information

On August 30, 2024, Patrick E. Bowe, Executive Chairman, entered into a Rule 10b5-1 plan to sell up to 99,215 shares of the Company's common stock, based on certain price parameters, from November 29, 2024 to November 28, 2025.
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Item 6. Exhibits
Exhibit NumberDescription
10.1
10.2
31.1*
31.2*
32.1**
101**Inline XBRL Document Set for the Condensed Consolidated Financial Statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q.
104**
Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.
* Filed herewith
** Furnished herewith

Items 3 and 4 are not applicable and have been omitted.

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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
THE ANDERSONS, INC.
Date: November 5, 2024/s/ William E. Krueger
William E. Krueger
President and Chief Executive Officer
Date: November 5, 2024/s/ Brian A. Valentine
Brian A. Valentine
Executive Vice President and Chief Financial Officer

The Andersons, Inc. | Q3 2024 Form 10-Q | 32